East Timor expects within two months to announce a deal with Australia on developing a disputed oil and gas field, its prime minister said on Thursday as the world’s youngest country courted foreign interest in its petroleum resources.
East Timor, which was Asia’s poorest nation upon independence in May 2002, has been in long-running talks with its neighbour Australia over a deal on sharing billions of dollars’ worth of oil and gas reserves under the Timor Sea.
The two countries in July hammered out the broad political terms of the pact but said the final technical details were still being worked out. Under the deal, they will defer deciding where their maritime boundary should be fixed for 50 years to allow oil and gas projects to go ahead.
“I can inform you today that I believe this process can be concluded in one to two months,” Prime Minister Mari Alkatiri told a gathering of foreign oil executives from more than 20 companies, a statement from his office said.
He said he maintained his position that the disputed area would be best developed by building a pipeline to feed gas into a processing plant in East Timor.
“As well as making commercial sense, building this plant would play a dynamic role in the development of our economy,” he said.
Oil companies had threatened to scrap Timor Sea projects if the two governments did not end their squabbling over the resources revenue.
Under the July deal Australia’s tiny northern neighbour will receive a larger share of revenues from the Greater Sunrise oil and gas field in return for shelving the boundary dispute.
It would also continue to receive a 90% share of revenues from the previously agreed Joint Petroleum Development Area, worth more than $7,5-billion.
Prime Minister Alkatiri also told the executives, attending a workshop for companies interested in bidding for exploration rights in the Timor Sea, that the country’s first-ever seismic survey indicated significant potential.
East Timor opened bidding in September on 11 blocks in its maritime area, billed as being “Asia’s last petroleum frontier”, with bids due in March and winners due to be announced next June.
The dispute between East Timor and Australia blew up when Australia insisted that a 1970s sea boundary agreed with Jakarta, East Timor’s former coloniser, should remain in place.
That boundary gives Canberra two-thirds of the sea area and most of its energy resources. East Timor wants the boundary to be set at the mid-point between the two countries, which would give it most of the resources.
Dili has said the resources revenue was its only chance of ending its dependence on foreign aid and accused Australia of trying to cut its financial lifeline. – AFP